Lending scheme could mean a better year for home buyers
ACCESS to finance should become easier for home buyers, according to Just Mortgages.
The mortgage broker believes that greater use of the Government's Funding for Lending scheme by major lenders in 2013 will help make it easier for people, particularly first-time buyers, to get on the housing ladder over the next 12 months.
It also thinks the reaction of individual lenders to the forthcoming mortgage market review, the findings of which come into force in 2014, could mean some players lending more ahead of its start date.
Total net lending for the third quarter of 2012 rose by almost £500m, according to the Bank of England, as the benefits of Funding for Lending began to trickle through.
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David Miles, director of Just Mortgages, said: "Innovations such as this, as well as the FirstBuy and NewBuy schemes, will go some way towards making it a little easier for first-time buyers to purchase a property.
"However, they won't be enough on their own to overcome what remains a generally challenging mortgage market. While the number of products coming on to the market is increasing, lending conditions (as well as criteria) as a whole continue to be tough and until these ease, the mortgage market will remain broadly flat in terms of transactions for the time being."
The firm is also forecasting continued growth in buy-to-let mortgage applications in 2013. Last year, they averaged 13 per cent of all applications. At the same time, the number of buy-to-let re-mortgage applications is forecast to significantly rise. Re-mortgages doubled for the year in 2012, compared with 2011, as more landlords than ever looked to release capital to purchase additional properties.
Comments
by ToryMan
Thursday, February 07 2013, 7:53PM
“Let me explain why this is bad news for first time buyers. Imagine that there are two potential buyers and one house. Both potential buyers have X amount of money. If the house is to sell it will sell at X pounds. You now move to a position where one or both buyers can borrow Y pounds. The house will now sell for X plus Y. Neither buyer has benefited – the buyer who has bought the house just has a larger lifetime debt.”